Leslie Morgan v. UPS

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
Nos. 02-2545/02-2835
___________
Leslie Morgan; Kenneth Stacker; *
Theodore Boldin, Class *
Representatives of the Plaintiff *
Class, *
*
Plaintiffs/Appellants/ *
Cross-Appellees, *
*
Enoch Love; Equal Employment *
Opportunity Commission, *
* Appeals from the United States
Intervenor Plaintiffs, * District Court for the Eastern
* District of Missouri.
v. *
*
United Parcel Service of *
America, Inc.; United Parcel *
Service, *
*
Defendants/Appellees/ *
Cross-Appellants. *
*
____________ *
*
Charles Cartwright, *
*
Movant/Appellant, *
*
Brian Needham, *
*
Movant, *
*
Bedell Finley; Frank Jackson, *
*
Movants/Appellants, *
*
Francis Truitt, *
*
Movant. *
___________
Submitted: April 14, 2003
Filed: August 30, 2004
___________
Before MORRIS SHEPPARD ARNOLD, BEAM, and MELLOY, Circuit Judges.
___________
BEAM, Circuit Judge.
Leslie Morgan; Kenneth Stacker, and Theodore Boldin, black managers at
United Parcel Service (UPS), brought a civil rights action alleging individual and
class claims of employment discrimination under Title VII and 42 U.S.C. § 1981.
These individuals moved for class certification and the district court partially granted
the motion, certifying four classes of employees (collectively, "Plaintiffs"). UPS
moved for summary judgment on both the Title VII and the 42 U.S.C. § 1981 class
claims or to decertify the class. Plaintiffs moved for partial summary judgment on
their class claims of racially discriminatory pay. The district court denied Plaintiffs'
motion, granted summary judgment to UPS, and denied UPS's motion to decertify the
class. It held that Plaintiffs had failed to adduce sufficient evidence of a pattern or
practice of class-wide discrimination. We affirm.
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I. FACTUAL BACKGROUND
UPS delivers packages world-wide for individuals and businesses. UPS is
divided into eleven geographic regions in the United States, each with a regional
manager. A region is subdivided into approximately six districts, each with a district
manager. The district managers are responsible for nearly every aspect of district
operations, including picking up, sorting, and delivering packages, as well as
employee development, promotion, and compensation. There are between sixty and
seventy districts in the United States and each one varies in geographic size,
population density, package volume, and labor climate. A district is further divided
into divisions, each with a division manager. Divisions are organized along
functional lines with some related to package operations and some related to
supporting staff.
Two levels of managerial employees exist below the division level: supervisors
and center managers. The entry level managerial position is a supervisor who reports
to the center manager. The center manager reports to the division manager, the
division manager to the district manager, and the district manager to the regional
manager.
UPS vests decisionmaking authority in district managers to promote employees
to division manager, center manager, and supervisor. District managers hold
"People's Meetings" approximately twice a year, where they discuss the upward
mobility of management personnel. At these meetings, information is presented on
supervisors and center managers in the district, and their performance and readiness
for promotion are assessed. At some of the meetings, a color photograph of the
individual is displayed. The meeting produces a list of the employees who the district
managers believe are ready for promotion to managerial positions. Open positions
within the company are not posted. The district manager may consult the list
compiled at the meetings to determine who will receive a promotion.
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II. PROCEDURAL BACKGROUND
Plaintiffs are all UPS center managers and they allege that UPS racially
discriminated against them in terms of upward mobility, working conditions, and pay.
With regard to the upward-mobility claim, Plaintiffs argue that the subjective
selection process for managerial positions at UPS limits the promotion of blacks,
which, in turn, inhibits their overall upward mobility and causes them to peak in their
careers at or below the center-manager level.
The district court bifurcated the trial into a liability/injunctive phase, followed
by a remedial/damages phase. Four classes were certified under Federal Rule of Civil
Procedure 23(b)(2) for the first phase. The court said it would consider certifying the
damages phase as a Rule 23(b)(3) class action if liability was established.
The Title VII denial-of-upward-mobility class was defined as:
[A]ll black salaried full-time employees of UPS nationwide employed
as center managers in Operations (Package, Hub, Feeder, Air) or Human
Resources at any time between December 20, 1991 and the date of
judgment, and who worked as a supervisory or managerial employee of
UPS for at least five years without being promoted above the center
manager level.
The Title VII unequal-working-conditions and unequal-pay class was defined as:
[A]ll black salaried full-time employees of UPS nationwide employed
as center managers in Operations (Package, Hub, Feeder, Air) or Human
Resources at any time between December 20, 1991 and the date of
judgment.
The 42 U.S.C. § 1981 denial-of-upward-mobility class was defined as:
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[A]ll black salaried full-time employees of UPS nationwide employed
as center managers in Operations (Package, Hub, Feeder, Air) or Human
Resources at any time on or after June 17, 1989 and the date of
judgment, and who worked as a supervisory or managerial employee of
UPS for at least eight years without being promoted above the center
manager level.
The 42 U.S.C. § 1981 unequal-working-conditions and unequal-pay class was defined
as:
[A]ll black salaried full-time employees of UPS nationwide employed
as center managers in Operations (Package, Hub, Feeder, Air) or Human
Resources at any time on or after November 21, 1991 and the date of the
judgment.
The district court granted a motion by the EEOC to intervene, but the EEOC
is not involved in these appeals. At the time of the original class certification,
Charles Cartwright was a member of at least two certified classes. After modification
of the certified classes, the district court ruled that he no longer qualified as a member
of any of the four classes and thus vacated the order allowing him to intervene.
Frank Jackson was also denied intervenor status. Both Cartwright and Jackson appeal
those decisions. Brian Needham, Francis Truitt, and Bedell Finley also sought, but
were denied, intervenor status; however, they are not parties to this appeal.1
Discovery proceedings produced reports, statistical analyses, and models of
UPS's employment data and practices prepared by experts for all parties. Plaintiffs
presented two experts who conducted statistical analyses: Dr. Weiner and Dr.
Stapleton. And the Defendant offered statistical analyses conducted by its expert, Dr.
Evans. At the close of discovery, UPS moved for summary judgment on all class
1
Bedell Finley is identified as an appellant in the notice of appeal, but no brief
has been filed on Finley's behalf.
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claims or to decertify the classes. Plaintiffs moved for partial summary judgment on
their class claim of discriminatory pay. UPS also moved to bar the testimony of two
of Plaintiffs' experts as inadmissible under Federal Rule of Evidence 702 and Daubert
v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993), because of faulty methodology and
data. The district court granted UPS summary judgment on all class claims and
denied Plaintiffs' summary judgment motion. The court also denied as moot UPS's
motions to decertify the class and to bar Plaintiffs' expert testimony.
III. DISCUSSION
Plaintiffs claim the district court erred in granting UPS's summary judgment
motion on each of the three class claims: (1) denial of overall upward mobility, (2)
working conditions, and (3) pay.
We review de novo a grant of summary judgment to determine whether a claim
is factually supported. Jackson v. Ark. Dep't of Educ., 272 F.3d 1020, 1025 (8th Cir.
2001). Summary judgment "shall be rendered forthwith if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). We must view all
facts in the light most favorable to the nonmoving party and give the nonmoving
party the benefit of all reasonable inferences that can be drawn from those facts.
Widoe v. Dist. #111 Otoe County Sch., 147 F.3d 726, 728 (8th Cir. 1998). However,
"[t]he mere existence of a scintilla of evidence in support of the plaintiff's position
will be insufficient; there must be evidence on which the jury could reasonably find
for the plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
Therefore, in a motion for summary judgment, "[t]he judge's inquiry unavoidably asks
whether reasonable jurors could find by a preponderance of the evidence that the
plaintiff is entitled to a verdict." Id.-6-
Plaintiffs' case centers on discriminatory treatment in the form of unequal
working conditions, promotions, and pay. More specifically, this class action alleges
a pattern or practice of discrimination with regard to each of these three aspects of
employment. In a pattern-or-practice class action, the class must prove that the
defendant "'regularly and purposefully' treated members of the protected group less
favorably and that unlawful discrimination was the employer's 'regular procedure or
policy.'" EEOC v. McDonnell Douglas Corp., 191 F.3d 948, 951 (8th Cir. 1999)
(quoting Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 & 360 (1977)).
Stated differently, the class must prove that the "'discrimination was the company's
standard operating procedure–the regular rather than the unusual practice.'" Craik v.
Minn. State Univ. Bd., 731 F.2d 465, 470 (8th Cir. 1984) (quoting Teamsters, 431
U.S. at 336). Upon an employer's summary judgment motion, the plaintiff class must
adduce some evidence from which this conclusion can be drawn. Proving
discrimination that is "'isolated or sporadic'" is insufficient. McDonnell Douglas, 191
F.3d at 951 (quoting Cooper v. Federal Reserve Bank, 467 U.S. 867, 876 (1984)).
Typically in a case like this one, plaintiffs will offer statistical evidence of
disparities between protected and unprotected employees who are otherwise similarly
situated. Craik, 731 F.2d at 470. In defense, employers attempt to show that the
plaintiffs' "'proof is either inaccurate or insignificant.'" Id. (quoting Teamsters, 431
U.S. at 360). To be legally sufficient, the plaintiffs' statistical evidence "must show
a disparity of treatment, eliminate the most common nondiscriminatory explanations
of the disparity, and thus permit the inference that, absent other explanation, the
disparity more likely than not resulted from illegal discrimination." Hervey v. Little
Rock, 787 F.2d 1223, 1228 (8th Cir. 1986) (quotation omitted). The bottom-line
question in this case is whether Plaintiffs produced more than a scintilla of evidence
showing UPS engaged in a pattern or practice of discrimination with regard to the
class members. The typical McDonnell-Douglas burden-shifting framework, while
not irrelevant, is not tremendously helpful in this context. Craik, 731 F.2d at 470-71
& n.7.
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A. Upward Mobility
Plaintiffs argue that the district court erred in granting summary judgment to
UPS on the denial-of-upward-mobility claims. Plaintiffs contend they proved
discrimination in upward mobility under both disparate-impact and disparate-
treatment models. Like the district court, we conclude Plaintiffs have failed to
establish a prima facie case because their evidence of racial disparities was
insufficient, giving rise to no inference of discrimination.
Initially, Plaintiffs offered a Wilcoxon test performed by Dr. Weiner. Plaintiffs
argue this test showed that it took longer for black center managers to be promoted
to their first division-level job than it did for white center managers. However, UPS's
experts pointed out, and Dr. Weiner admitted, that she did not perform the correct
Wilcoxon test. When Dr. Weiner used the correct test, she determined that there was
no racial disparity in the pattern of these promotions.
Next, Plaintiffs offered evidence that in thirty-five of UPS's districts, there
were no blacks promoted to division manager between 1989 and 1998. The district
court pointed out two problems with this analysis. First, this tally did not take into
account whether there were any qualified black employees available for promotion
in those districts. UPS's expert, Dr. Evans, performed an analysis taking the
availability of qualified black employees into account and determined that the number
of districts in which no blacks were promoted was actually lower than would be
expected. Second, even a successful showing of discrimination in some districts does
not prove nationwide discrimination. In fact, as the district court pointed out, proof
of discrimination in some districts and not others tends to defeat the argument that
discrimination was UPS's nationwide standard operating procedure.
In addition, Plaintiffs presented charts comparing the representation of blacks
at the division-manager level to the percentage of all black officials and managers,
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operatives and laborers, blue collar workers, and the total UPS workforce. The
district court properly found that a racial disparity amongst these populations would
not give rise to an inference of discrimination. "The 'proper comparison [is] between
the racial composition of [the at-issue jobs] and the racial composition of the
qualified . . . population in the relevant labor market.'" Wards Cove Packing Co. v.
Atonio, 490 U.S. 642, 650 (1989) (quoting Hazelwood Sch. Dist. v. United States,
433 U.S. 299, 308 (1977)) (alterations in original). "[S]tatistics based on an applicant
pool containing individuals lacking minimal qualifications for the job would be of
little probative value." Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 997
(1988). The upward-mobility classes consist of center managers who have not been
promoted to division manager. Thus, the probative inquiry involves a comparison
between the percentage of division managers who are black and the percentage of
qualified employees who are black in the population from which division managers
are chosen. As the district court held, "plaintiff's reliance on a bottom line racial
imbalance in the workforce is insufficient to establish that blacks are less likely to be
promoted." Morgan v. UPS, No. 4:94-CV-1184, Mem. & Order at 12 (E.D. Mo. June
26, 2000).
Finally, Dr. Weiner presented a cohort analysis suggesting it takes black
employees significantly longer to be promoted from their first full-time supervisor
position to division manager than it takes similarly situated white employees.
However, Dr. Weiner admitted that the data she looked at "is not appropriate for
examining the time to promotion from center manager to division level manager," id.
at 13, and center managers are the class of employees at issue. UPS's expert, Dr.
Evans, performed an analysis on the correct set of promotions and concluded that it
actually takes whites longer than blacks to get promoted from center manager to
division manager.
Plaintiffs' proof is insufficient under both the disparate-treatment and disparate-
impact models. To avoid summary judgment under the disparate-treatment model
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through the use of statistics, Plaintiffs must show that "[w]hen the proper labor
market is considered, the statistical evidence is sufficient to raise an inference of
discrimination." Paxton v. Union Nat'l Bank, 688 F.2d 552, 564 (8th Cir. 1982). As
discussed above, Dr. Weiner's correct Wilcoxon test showed no racial disparity, and
her other analyses do not take into account the proper labor market—available
qualified employees. Thus, the claim fails under the disparate-treatment model.
And, to the extent Plaintiffs raise a disparate-impact claim,2 they have failed
to "show relevant statistical disparities permitting an inference of racial imbalance
in defendant's workforce." Emanuel v. Marsh, 897 F.2d 1435, 1439 (8th Cir. 1990).
The relevant inquiry was whether promotions from center to division manager were
racially discriminatory, taking into account the proper pool of available qualified
employees. The evidence presented of overall racial imbalances and even more
general trends in upward mobility is insufficient. Plaintiffs did not adduce sufficient
evidence to avoid summary judgment.
B. Working Conditions
The district court ruled that Plaintiffs presented insufficient evidence to prove
a class-based claim of unequal working conditions. Plaintiffs argue that the district
court erred because (1) UPS did not move for summary judgment on working
2
It is difficult to understand this claim as one of disparate impact. Plaintiffs'
claim as to the subjective decisionmaking process is not that this facially race-neutral
process has an adverse impact on blacks and the process cannot be justified by
business necessity. Rather, Plaintiffs claim the subjective decisionmaking resulted
in blacks remaining in center-manager positions longer than whites before they were
promoted to the division-manager level. We read Plaintiffs' argument as alleging
disparate treatment through the subjective decisionmaking process; that is, that the
subjective selection process provided the opportunity for UPS to choose not to
promote some employees because they were black—to discriminate on account of
race.
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conditions, and (2) Plaintiffs presented sufficient evidence to survive summary
judgment.
UPS's motion for summary judgment was sufficient. UPS moved for summary
judgment "on Class Plaintiffs' Amended and Supplemental Complaint," which
encompassed claims of unequal working conditions. UPS also specifically mentioned
working conditions in its motion and asked the court to strike those class claims as
unsupported. Plaintiffs were aware that the working-conditions claim was at issue
because in their response to the summary judgment motion they discussed working-
conditions evidence and cited the record on the issue. We therefore agree with the
district court that UPS moved for summary judgment on this claim.
We also agree that Plaintiffs' proof on the working conditions was insufficient
to survive summary judgment. While Plaintiffs correctly note that statistical evidence
is not required to prove pattern-or-practice discrimination, Catlett v. Mo. Highway
& Transp. Comm'n, 828 F.2d 1260, 1265 (8th Cir. 1987), the anecdotal evidence here
is not enough to support their claims. Plaintiffs' evidence consists of statements by
individual class members made in response to interrogatories, unsigned by the class
members. The district court did not err in finding this evidence insufficient. The
grant of summary judgment for UPS on the working-conditions claim is therefore
affirmed.
C. Pay
Plaintiffs argue that UPS was not entitled to summary judgment on the
discriminatory pay claim. They contend that they presented sufficient evidence of a
pattern or practice of discrimination with regard to pay in the form of two multiple
regression analyses. They say that those analyses give rise to a reasonable inference
of discrimination because they show UPS paid white center managers more than
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black center managers after controlling for many legitimate reasons for such a pay
disparity.
A multiple regression analysis attempts to reveal relationships between
explanatory variables and a dependent variable. Daniel L. Rubinfeld, Reference
Guide on Multiple Regression, in Federal Judicial Center, Reference Manual on
Scientific Evidence 181 (2d ed. 2000). Explanatory variables are the expected
influences on the dependent variable. Id. In this case, pay is the dependent variable.
The explanatory variables are what bring race into the picture. In effect, the
regression controls for the explanatory variables—those factors that one would expect
to influence pay—and then compares the wages of white and black employees. "At
best, the regression equation used to assess discrimination in compensation levels can
be viewed as a good representation, based on available information, of what factors
seem to be related to compensation levels, on average." Ramona L. Paetzold &
Steven L. Willborn, The Statistics of Discrimination: Using Statistical Evidence in
Discrimination Cases § 6.01, p.3 (2002). Thus, the selection of explanatory variables
is quite important. However, even the best regression equation cannot directly show
discrimination because it cannot prove causation. The most it can show is a
correlation that can give rise to an inference of discrimination. Id. § 2.05; Rubinfeld,
ante, at 183-85. Whether such an inference is reasonable is the legal question we
address.
All three experts performed regression analyses, and all agreed that this form
of statistical analysis was proper. But the experts came to different conclusions
because each of them included different explanatory variables. Plaintiffs' first expert,
Dr. Weiner, found a statistically significant pay disparity of between $1,275 and
$2,050 per year. She included two years of measured performance,3 pay region, and
3
Performance was quantified using performance evaluations that UPS
conducted on a yearly basis from 1991 until 1995.
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time as a supervisor as explanatory variables. Plaintiffs' other expert, Dr. Stapleton,
found a statistically significant pay disparity of between $562 and $852 per year. He
included two years of measured performance, geographic district, tenure with UPS,
time as a center manager, and whether the employee was currently in Human
Resources, Air Operations, or Package Operations.
UPS expert Dr. Evans' preferred method found statistically significant pay
differentials in each year except 1995, for which he found no statistically significant
difference in pay. This analysis was achieved using as variables "union tenure, part-
time supervisor tenure, full-time supervisor tenure, center manager tenure, an
indicator for having previously been a division manager and others for having been
in air operations or having been a Package Operations Supervisor, indicators for the
various districts, and current and past performance." Dr. Evans concluded that his
study demonstrated there was no statistically significant difference in pay between
black and white center managers during the class period. He reasoned that 1995 was
the only year for which he could do a proper analysis, because it was the only year for
which there was sufficient measured performance data. In other years, he said, the
analysis incorrectly indicated a disparity because insufficient measured performance
data existed. Dr. Evans admitted that when no performance data was included, a
statistically significant pay disparity existed.
Because the only evidence that substantiates Plaintiffs' claim is their regression
analyses, and because this sort of evidence is subject to Daubert, two issues arise: (1)
admissibility and (2) the propriety of summary judgment. If the analyses were not
admissible, then summary judgment was appropriate. If the analyses were admissible,
summary judgment may or may not be appropriate, depending on whether they create
a reasonable inference of a pattern or practice of disparate pay.
It is not clear whether the district court deemed Plaintiffs' regressions
inadmissible or concluded that they did not create a genuine issue of fact. The district
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court found that "the variables are properly included in Dr. Evans' analysis." Morgan,
Mem. & Order at 17. And it concluded, "defendants have shown that any pay
disparity between black and white center managers is caused by factors other than
race." Id. at 18.
We defer to admissibility determinations under an abuse-of-discretion standard
of review, even at summary judgment. Gen. Elec. & Co. v. Joiner, 522 U.S. 136, 143
(1997). The district court did not mention Daubert, but its analysis plainly hinges on
problems with Plaintiffs' analyses that are arguably methodological—what
explanatory variables are proper. Daubert, 509 U.S. at 592 (stating that admissibility
determinations "entail[] a preliminary assessment of whether the reasoning or
methodology underlying the testimony is scientifically valid and of whether that
reasoning or methodology properly can be applied to the facts in issue"); accord
Eckelkamp v. Beste, 315 F.3d 863 (8th Cir. 2002) (applying deferential review to
evidentiary determination plainly premised on the methodolgical underpinnings of
an expert's opinion). But because the district court denied UPS's motions relating to
Daubert and Rule 702 as moot,4 we are not inclined to accord the trial court's decision
that degree of deference. Moreover, the question of what explanatory variables
should be included in a particular regression normally "affect[s] the analysis'
probativeness, not its admissibility."5 Bazemore v. Friday, 478 U.S. 385, 400 (1986).
4
The import of the district court's mootness rationale is questionable. On one
hand, a Daubert determination in the course of the summary judgment ruling would
moot the Daubert motion. But, on the other hand, a summary judgment ruling that
finds summary judgment appropriate even if the evidence is admissible would have
the same effect. In any event, UPS has not cross-appealed the denial of its
evidentiary motions.
5
Some regressions can be so incomplete in terms of explanatory variables that
they lose all probative value with regard to the question of discrimination and are,
thus, inadmissible. Bazemore v. Friday, 478 U.S. 385, 400 n.10 (1986).
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While the omission of variables from a regression analysis may render
the analysis less probative than it otherwise might be, it can hardly be
said, absent some other infirmity, that an analysis which accounts for the
major factors must be considered unacceptable as evidence of
discrimination.
[I]t is clear that a regression analysis that includes less than all
measuarable variables may serve to prove a plaintiff's case.
Id. at 400 (quotation omitted).
Admissible regressions, however, do not necessarily mean summary judgment
is inappropriate. See Daubert, 509 U.S. at 596 ("[I]n the event the trial court
concludes that the scintilla of evidence presented supporting a position is insufficient
to allow a reasonable juror to conclude that the position more likely than not is true,
the court remains free to . . . grant summary judgment . . . ."). While a trial court may
not weigh the evidence or consider credibility at summary judgment, Anderson, 477
U.S. at 255, it can use the scale to a limited degree; it must ensure that the nonmoving
party has at least a scintilla of evidence in support of its position. In so doing, "the
court must draw all reasonable inferences in favor of the nonmoving party." Reeves
v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); accord Carter v.
Chrysler Corp., 173 F.3d 693, 701 (8th Cir. 1999).
"[G]ross statistical disparities . . . alone may in a proper case constitute prima
facie proof of a pattern or practice of discrimination." Hazelwood Sch. Dist. v.
United States, 433 U.S. 299, 307-08 (1977). And the usefulness of statistics "depends
on all of the surrounding facts and circumstances." Teamsters, 431 U.S. at 340.
Here, the regression analyses are all the evidence of discriminatory pay that Plaintiffs
have, so those analyses must show a gross statistical disparity and this must be a
proper case—a case in which the gross disparity can give rise to a reasonable
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inference that paying blacks less because they are black is UPS's standard operating
procedure.
A reasonable inference of such discrimination does not arise in this case. First,
Plaintiffs' regressions fail to take into account past pay, performance, or both.
Second, when evaluated in the context of the undisputed facts, the regressions fail to
create a triable case of pattern-or-practice discrimination.
Evaluating the propriety of explanatory variables is a somewhat comparative
exercise. When a defendant attacks a plaintiff's regression, he must typically do more
than point out the flaws in his opponent's analysis. Instead, the defendant must show
that the omission had an impact on the result. See Catlett, 828 F.2d at 1266.6 But,
"there may be a few instances in which the relevance of a factor . . . is so obvious that
the defendants, by merely pointing out its omission, can defeat the inference of
discrimination created by the plaintiffs' statistics." Palmer v. Shultz, 815 F.2d 84, 101
(D.C. Cir. 1987).
Selecting proper explanatory variables is a function of the particular employer's
compensation determinations. Under UPS's pay scheme, center-manager pay has two
components: base pay and salary increases. A center manager's base pay is
determined when he becomes a center manager, subject to later salary increases based
on performance. An individual's base pay remains constant during his tenure as a
6
Plaintiffs appear to be of the opinion that the use of an adversary's expert
testimony to evaluate the admissibility or probative value of their regressions
constitutes a departure from the proper summary judgment standard. We disagree.
It is true that courts may neither weigh the evidence nor make credibility
determinations at summary judgment. But, as mentioned, the propriety of summary
judgment must be, to a limited extent, based on the probative value of the
nonmovant's evidence. We can discern no requirement that experts' testimony such
as this must be considered in isolation when a district court assesses probative value.
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center manager. Center-manager base pay is calculated in part by using the
individual's prior pay, generally as a supervisor. Supervisor pay has the same two
elements—base pay at the time of promotion and salary increases based on
performance during one's tenure as a supervisor. Supervisor base pay is calculated
using that individual's prior hourly wage. Individuals in certain operations (e.g., air
operations) are paid more as a part of their job; thus, their hourly rate, and supervisor
and center-manager base pay are higher. Union membership could have a similar
effect.
The discrimination alleged in this claim is that black center managers, between
1991 and the time of judgment, were paid less than similarly situated white center
managers because they were black. All experts agree that their regressions revealed
no racial disparity in terms of center-manager pay raises for the class period. So in
order for the pay of black class members to be lower than that of white center
managers, the discrimination had to occur with regard to center-manager base pay.
Because the base pay is set according to past pay, variable(s) representing that factor
are important.
As UPS points out, both Dr. Weiner and Dr. Stapleton excluded past pay from
their regressions. Dr. Stapleton admitted that if past pay was included in the analysis,
then no statistically significant disparity between white and black pay existed.7
Plaintiffs argue that the exclusion was justified under Bazemore v. Friday, 478 U.S.
385 (1986). We disagree.
7
The relationship between past pay and current pay is of such obvious
relevance that the defendant should not have to show its effect to impugn the
regression. See Palmer, 815 F.2d at 101. Additionally, when a plaintiff's expert
admits that including an explanatory variable would explain the apparent disparity,
we do not think a defendant is barred from arguing its omission was erroneous simply
because he does not present that factor and its effect in his analysis.
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Bazemore's relevance involves the somewhat related questions of what role
past pay has in a pay discrimination case and when an explanatory variable is
properly omitted from a regression analysis. Plaintiffs correctly note that Bazemore
means that past discriminatory pay cannot be a legitimate excuse for a later pay
disparity. 478 U.S. at 394-96. Regression analyses in discrimination cases attempt
to control for the legitimate reasons for pay disparities through the use of explanatory
variables. But, illegitimate reasons—reasons themselves representative of the
unlawful discrimination at issue—should be excluded from the regression (or
otherwise dealt with) to avoid underestimating the significance of a disparity. See
Paetzold & Willborn, ante § 6.13 (discussing the problem of tainted variables). Thus,
a regression could be probative of discrimination without taking into account past pay
if that past pay was set according to race. This is because past discriminatory pay
makes current pay disparities actionable8 under Bazemore, and because the variable
can be omitted from a regression if tainted by the discrimination at issue.
In Bazemore, both the district court and the court of appeals found that past pay
was set according to race. 478 U.S. at 390-91, 394, 401-02. Thus, the salary figures
used in the plaintiffs' regression in that case were proper even though past
discriminatory pay accounted for some of the later disparity. In other words,
Bazemore's regressions did not need to account for past pay because there was
evidence of past discrimination. Here, Plaintiffs would be excused from accounting
for past pay if they could show past discrimination. We see no such evidence.
8
In Bazemore, the past discriminatory pay was inactionable because it occurred
before Title VII governed the public employer being sued. Here, pre-1991 (i.e., pre-
class period) pay, even if discriminatorily set, is inactionable because the limitations
period has run. It is the post-1991 (i.e., the class period) discrimination that is at
issue; thus, Plaintiffs' asserted disparity during that period must be linked to race,
which under Bazemore could include past considerations of race with regard to pay.
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Plaintiffs appear to justify the omission of past pay by pointing to the class-
period disparity that their experts found, inferring discrimination, and claiming that
a reasonable inference is that past pay disparities were also race based. This
argument is circular. The correlation between race and center-manager base pay from
1991 on exists only if past pay is omitted from the regression. Past pay can only be
omitted if it is somehow linked to race. Plaintiffs' only evidence of discrimination in
past pay is the apparent correlation between race and center-manager base pay during
the class period. But that correlation is what Plaintiffs have evidence of only by
omitting past pay. They have no evidence, statistical or otherwise, that past pay
disparities were racially discriminatory. This sort of bootstrapping cannot create an
inference of discrimination with regard to either class-period base pay or past pay.
The variables Plaintiffs did use also do not account for the role of past pay. For
example, because performance affects past pay, performance variables arguably could
be proxies for past pay.9 Dr. Stapleton appreciated this aspect of the case but refused
to include "lagged" performance measures precisely because "it's really just
explaining current pay experience by past pay experience." And he offered this past-
pay rationale as his reason for omitting most other experiential factors that affect pay
at UPS. As explained above, this observation could be meaningful if there had been
some evidence that past pay experience was tainted by discrimination. There was
none here and the assumption that past pay should be omitted, as well as most factors
related to it, was unjustified.
There are a variety of other concerns that reduce the import of Plaintiffs'
regressions. The performance data, which was included in all experts' regressions to
some extent, poses a problem. Performance data from performance evaluations that
9
Interestingly, given the problems in the performance data explained below,
past pay rates may have been a dependable variable to use as a measure of
performance, possibly in addition to the performance data that was available.
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UPS conducted existed for 1991, 1992, 1993, 1994, and 1995.10 Performance was
certainly relevant to the employer's pay decisions, but it appears to us that
performance could only affect center-manager base pay indirectly—by influencing
past supervisor pay through past supervisor salary increases, past hourly rates, or
both. So Plaintiffs' regression should have utilized past performance as far back as
was available, rather than just the two years they did include.
UPS offered its own regression indicating the omission had an impact. Dr.
Evans conducted a regression for 1995, included all available performance data, and
concluded that no statistically significant pay disparity remained—i.e., the inclusion
of performance eliminated the significance of race. We think this was sufficient to
show the adverse impact of omitting available performance data and showed that
other performance, even though not measured by evaluations, was important. At the
very least, the fact that no correlation existed in 1995 severely damages the inference
that UPS had a nationwide standard operating procedure of paying blacks less than
whites.
We also have no indication of which employees' performance data was
included in the regressions. Given the nature of the claim—that center managers'
base pay was lower for blacks than whites—and the fact that center-manager base pay
is set only at the time of promotion, performance prior to the time of promotion is all
that is relevant. Thus, for class members that were promoted to center managers
before 1991, there are no performance evaluations from which to draw data. And for
individuals that were promoted after 1991, until 1995, the only relevant performance
data comes from pre-promotion evaluations. Post-promotion performance could
simply have no affect on base pay. And such performance seems too attenuated an
indicator of pre-promotion performance to be included.
10
Even in those years the data was incomplete.
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The nature of UPS's management system also makes a claim of nationwide
pattern-or-practice discrimination difficult. Pay was set according to a decentralized
scheme in which district managers were given the discretion to set pay. With
approximately seventy districts in the United States, each with their own manager, the
statistical evidence would have to be quite strong to raise, by itself, an inference of
nationwide discrimination.
One of the most important flaws in Plaintiffs' case is that they adduced no
individual testimony regarding intentional discrimination. As mentioned above,
Plaintiffs' purported anecdotal evidence was insufficient for the working-conditions
claim, and we see none with regard to pay. Although such evidence is not required,
the failure to adduce it "'reinforces the doubt arising from the questions about validity
of the statistical evidence.'" EEOC v. Sears, Roebuck & Co., 839 F.2d 302, 311 (7th
Cir. 1988) (quoting Griffin v. Board of Regents, 795 F.2d 1281, 1292 (7th Cir.
1986)). Such evidence would bring the "cold numbers convincingly to life."
Teamsters, 431 U.S. at 339.
Finally, as explained above, there was no apparent discrimination with regard
to pay raises, promotions, or working conditions. Statistical evidence like that
adduced here, at best, can only show a correlation between race and the dependent
variable that gives rise to a further inference of pattern-or-practice discrimination in
a proper case. Here the flaws are too many and the probative value too slight for
Plaintiffs' regressions to carry the day by a preponderance of the evidence in the
context of this case. It would be manifestly unreasonable to infer from Plaintiffs'
regression analyses that UPS set center managers' base pay lower for blacks as a
matter of practice all across the country during the period in question. Accordingly,
summary judgment was appropriate.
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D. Remaining Issues
We affirm the two remaining issues on appeal. First, the district court did not
err in denying the motions to intervene brought by Frank Jackson and Charles
Cartwright. Second, with regard to UPS's cross-appeal, the district court properly
denied as moot the motion to decertify the classes.
IV. CONCLUSION
We affirm.
MELLOY, Circuit Judge, concurring and dissenting.
I concur in the majority opinion on the upward mobility and working
conditions claims. However, I respectfully dissent from the majority opinion as to the
equal pay claim. I believe the Plaintiff has generated a submissible case on that issue.
I would reverse as to the equal pay claim and remand for trial.
This is a case in which all the experts, Defendant’s expert included, found a
statistically significant difference between pay of white center manager and black
center managers at UPS in all years at issue except 1995, for which Defendant’s
expert found there was no statistically significant difference in pay.
Both parties presented admissible evidence on the issue of pay disparity. All
three experts used multiple regression analyses to determine whether the difference
in pay was attributable to factors other than race. Each expert identified the factors
he or she found to be relevant in determining pay and controlled for these factors in
their analyses. Many of the same factors were included in the different studies, such
as pay region, performance evaluations, and tenure. The main disagreement between
the experts related to performance evaluation data. The issue on appeal came down
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to whether all available performance data should be included in the analyses or
whether two years of performance data was sufficient.
None of the experts included past pay as a factor in their analysis. However,
the majority focuses on this would-be factor and upholds summary judgment for the
Defendants based on the Plaintiffs’ omission of past pay. They do so despite the fact
that all three qualified experts chose not to include past pay as a factor. They do so
while acknowledging that “it is clear that a regression analysis that includes less than
‘all measurable variables’ may serve to prove a plaintiff’s case.” Bazemore v. Friday,
478 U.S. 385, 400 (1986).
At the summary judgment stage, “[c]redibility determinations, the weighing of
the evidence, and the drawing of legitimate inferences from the facts are jury
functions, not those of the judge . . . . The evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The question decided by the majority,
whether past pay must be added as a factor in order for the Plaintiffs to prove a prima
facie case, is a quintessential jury issue.
In considering the evidence in the light most favorable to the Plaintiffs, I would
find that the Plaintiffs have generated a jury question on the issue of whether a prima
facie case of pay disparity exists. The issue of whether Plaintiffs’ duly-qualified
experts considered all the appropriate variables is an issue for the jury. Accordingly,
I would reverse the grant of summary judgment for the Defendants on the equal pay
claim.
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